You May Qualify for Earned Income, Child Tax Credits

North Dakotans may be able to take advantage of the earned income and child tax credits, says Debra Pankow, North Dakota State University Extension Service family economics specialist.

The earned income tax credit (EITC) helps low- and moderate-income families keep more of what they earned. The child tax credit (CTC) could reduce a family’s federal income tax by up to $1,000 per qualifying child.

“If you worked in 2011, had children living with you and earned less than about $46,000, or did not have children living with you and earned less than about $13,600, you could qualify for the earned income credit (and child tax credit if you have children),” Pankow says. “The tax credit could be as high as $5,761 – or more.”

In 2011, 43,244 North Dakotans received earned income tax credits totaling $82.66 million. Taxpayers received an average of $1,912. Nationwide, more than 26 million people received nearly $59 billion.

To claim an EITC on your tax return, you need to meet all of the following criteria:

You have a valid Social Security number

You have earned income from an employer, self-employment or another source

You can’t use the “married, filing separate” filing status

You must be a U.S. citizen or resident alien all year, a nonresident alien married to a U.S. citizen, or a resident alien and you and your spouse are filing a joint return

You are not a qualifying child of another person

You can’t file Form 2555 or 2555-EZ, which are related to foreign earned income

Changes in the EITC for 2012 mean some families could receive even larger amounts this year, Pankow says. For example, larger families with three or more children will receive more benefits. Also, EITC income limits for married workers have been raised.